Foreclosure is a judicial process where the lender files a claim to sell the house when a Calgary homeowner fails to make subsequent payments against the debt. It is challenging, but if you understand the different phases and take the risk, you can protect your house and regain control over your financial instability. So, here we have a detailed guide on what triggers a foreclosure and how to stop it.
What Triggers Foreclosure?
When a homeowner fails to meet the mortgage obligations, the lender can initiate foreclosure by filing a claim to sell the house. The common reasons that trigger foreclosure are the loss of a job or if your income reduces due to unforeseen reasons, it becomes difficult to maintain the living cost in Canada. Also, the fund’s payments fund can be redirected to pay medical bills if there are medical emergencies. Moreover, overspending or unnecessary spending can also lead to credit card debt, which will strain away the finances that could have been used to meet the mortgage payments.
Phases of Foreclosure in Calgary
The foreclosure procedure goes through several stages, which work in the homeowner’s favour, giving them time to act and safeguard the house. The initiation phase includes the lender sending a notice after a few missed payments, notifying you to communicate and seek alternative repayment solutions.
If you do not revert after 90 days, a legal notice is issued demanding payment. Finally, when you fail to communicate, the lender files a foreclosure claim with the court, and the homeowner is given a redemption period to pay the areas. If no resolution is reached to stop the foreclosure, then under the court’s supervision, the property is sold to recover the dues.
Steps to Stop Foreclosure
To stop foreclosure, you need to follow the below steps:
- Reassess Your Finances
Understanding your present financial condition is the first step toward stopping a foreclosure. You must identify where you are spending more and cut the expenses to redirect the funds toward your mortgage. You must create a budget to help you save, pay for your daily requirements, and meet your mortgage obligations.
- Negotiate with Your Lender
If you want to know “how do I stop foreclosure, ” you must start negotiating with your lender. They can help you with repayment plans. Ask them to spread the payments over a long time, which will allow you to pay the debt without any stress. Alternatively, you can also opt for Forbearance Agreements, where you have to request either reducing the payment or the interest rate. You can also ask for a temporary suspension of the payment until you gain financial stability.
- Explore Refinancing Options
The most manageable way to stop the foreclosure is to reduce the monthly payments to refinancing, where you will switch to a lower interest rate, leading to a secured loan. You can also consolidate the debt by combining every obligation you have to meet into a refinanced single mortgage plan for easier management.
Conclusion
If none of the above options align with your financial status, you can sell your property before the foreclosure. This is the best option because you retain the equity through a quick sale. You have to look out for cash house buyers in Calgary or real estate investors with the assistance of local experts who can help expedite the process.